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Intel Buys Sparkolor's Assets

Light Reading
NFOEC News Analysis
Light Reading
9/17/2002
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DALLAS -- NFOEC -- News has leaked out that Intel Corp. (Nasdaq: INTC) has bought the assets of yet another tunable laser company, Sparkolor Corp.

Jerry R. Bautista, director of technology and strategic marketing for Intel's photonics group, confirmed the news at the NFOEC show yesterday. He says Intel will announce the deal officially in the next few days.

Financial details were not disclosed, but it appears not to have been an outright acquisition. According to sources, Intel has purchased Sparkolor's intellectual property and hired some of its technical staff. The other assets of the company, including all its sales and marketing people, were not included in the deal.

Intel already has its own internally developed tunable laser technology, along with the tunable laser business of New Focus Inc. (Nasdaq: NUFO), which it scooped up in May this year, raising questions about how Sparkolor's technology will fit in with Intel's other optical acquisitions (see Intel Scoops Up New Focus Laser Unit).

According to Bautista, Intel is buying Sparkolor for its grating technology rather than its tunable lasers. "Sparkolor had some very interesting technology for thermally-tuned, polymer-enhanced gratings," he says.

More details of this technology are described in a patent that Light Reading unearthed last year (see Sparkolor Secrets Surface). Sparkolor had developed a thermally-tuned laser with the tuning section manufactured out of glass (silica). Glass is ideal for this application because its refractive index properties change strongly with temperature. However, adjacent sections of glass, which do not need tuning, will also be affected by the heat. Sparkolor's big idea was to use a polymer layer with an opposite refractive index change to compensate for the thermal effects in places where they were not desired.

Intel could use this kind of technology to make tunable filters and reconfigurable optical add-drop multiplexers, or simply to temperature-stabilize glass-based optical components.

But while the technology sounds interesting, it is largely unproven. While companies both large and small have evangelized the properties of polymers, none has really had success in bringing polymer technology to market.

Sparkolor's investors included Optical Capital Group, New Enterprise Associates (NEA), and Storm Ventures.

Intel is still shopping for other startups, judging by remarks made by Gordon Hunter, general manager of Intel's optical products group, at last week's European Conference on Optical Communications (ECOC) in Copenhagen, Denmark.

At a dinner in the Tivoli Gardens, Hunter acknowledged that Intel still has some gaps in its optical component portfolio, and eventually (after some needling by Light Reading) he named two of them -- lasers and MEMS (micro-electromechanical systems). Sparkolor doesn't really fall into either of these categories.

— Pauline Rigby, Senior Editor, Light Reading
www.lightreading.com

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gea
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gea,
User Rank: Light Beer
12/4/2012 | 9:45:52 PM
re: Intel Buys Sparkolor's Assets
Damn. Sure seems like Intel is thinking long term. Does anyone not believe that optical will one day return with a vengeance? When that happens, it looks like Intel will be right there. I'm amazed that Intel is able to operate with such a long term focus. Most companies are jettisoning assets that don't make money RIGHT NOW...

Any Intel employees out there? Is Intel really a smart company, or just lucky? Their track record is long enough that I'm starting believe the latter.
gea
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gea,
User Rank: Light Beer
12/4/2012 | 9:45:52 PM
re: Intel Buys Sparkolor's Assets
Damn. Sure seems like Intel is thinking long term. Does anyone not believe that optical will one day return with a vengeance? When that happens, it looks like Intel will be right there. I'm amazed that Intel is able to operate with such a long term focus. Most companies are jettisoning assets that don't make money RIGHT NOW...

Any Intel employees out there? Is Intel really a smart company, or just lucky? Their track record is long enough that I'm starting believe the latter.
LightBeating
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LightBeating,
User Rank: Light Beer
12/4/2012 | 9:45:45 PM
re: Intel Buys Sparkolor's Assets
Gea,

They look smart. They haven't made too many "crazy" (meaning $B+) acquisitions, liek everybody else during (and even after) the bubble. Rather, they go out there and scoop up the technology and good technical people from failed startups, at very low prices, and have a strong (albeit discreet) internal R&D program in optics. Yes, they could surprise everyone when the time comes.

LB
slhardy
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slhardy,
User Rank: Light Beer
12/4/2012 | 9:44:33 PM
re: Intel Buys Sparkolor's Assets
I think both. Strategy and luck are a good thing these days.
curious__george
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curious__george,
User Rank: Light Beer
12/4/2012 | 9:44:19 PM
re: Intel Buys Sparkolor's Assets
Yes, as an employee I can honestly say that the senior management "gets it". They do understand that the CPU business ($6B/qtr rev!) is impacted positively by bringing more bandwidth to the desktop. As such they support the long term objective of building an optical infrastructure. Further, they also understand that we cannot grow quickly enought organically and need to be aggressive in the marketplace through acquisitions and partnerships. It's not all rosey however, success in the CPU business does not necessarily mean success in photonics. The company must be flexible and be able to adjust to the very different photonics market. This is not easy for career Intel types.
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